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Which Financial Documents Should You Throw Away?

Determine how long you should keep financial documents!

For many who haven’t opted to go paperless, receipts, bills, pay stubs, tax forms, and other financial documents can flood into the mailbox every month. However, it doesn’t have to be that way! Some papers can be kept, others can be shredded and thrown away! For the start of this new year, choose to be organized by discarding unneeded documents.

For your guide on what you should file away safely and what to slide in the shredder, read on!

Receipts – For anything you might itemize on your tax return, keep for three years with your tax records.

Home improvement records – Keep ahold of these for at least three years after the due date of the tax return that includes the income or loss on the home when it’s sold. When aiming to sell the house that you have made improvements to, aim to keep receipts for seven years as these may lower the taxable gain when it’s sold.

Medical bills – Keep for up to one year. Your insurance company may request proof of a doctor visit or other medical claims.

Paycheck stubs – Hold these until the end of the year and discard after comparing to your W-2 and annual Social Security statement.

Utility bills – 1 year then discard! Unless you’re claiming a home office tax deduction, then keep them for three years.

Credit card statements – Keep until you’ve confirmed the charges and have proof of payment.

Bank statements – If you’re audited by the IRS, you’ll need to keep these for up to three years.

Loans that have been paid off – Keep these records for seven years.

Active insurance documents – Keep these while they are active. All expired contracts can be discarded.